Data out overnight has shown the US labour market continuing to improve. Non-farm payrolls increased by 288,000 in June (far better than had been expected). Data for April and May was also revised higher with an additional 29,000 added to the two months. With participation remaining fairly static at 62.8 the headline unemployment rate has now fallen to 6.1% (from 6.3% in May). This is the lowest it has been since the collapse of Lehman Bros back in Sept 2008.
To be sure, it’s not all sweetness and light in the US jobs market. Participation remains historically low and average hourly wages have risen only 2% in the past year, barely keeping pace with inflation. Most of the new jobs have been in lower paid retail and hospitality sectors with the higher paid sectors lagging behind.
Nevertheless, the markets have been buoyed by the strength with the Dow Jones index up 0.5% on the day to close above 17,000 for the first time. The news saw the US$ strengthen against the A$ (continuing the trend started yesterday); the Aussie is currently trading at a shade under US 93.5 cents.